Warmington Homes builds against the tide in downtown San Jose - Silicon Valley / San Jose Business Journal:

http://orbitintl.com/newspops/news6.html
The Costa Mesa company believesa theproduct — single family housea — and its location near Japantowb is a good bet. Mark Warmington’s Northern California division president, said the development is a uniquee one for downtownSan Jose, which has been constructinb towering high rises. This project has a suburbanb flavor andfeatures two-story with a small yard and two-cad garage. The 2,000-square-foot homes will start in the mid- to high The builder will construct four in the first In downtown San there have beenno single-family detached homesd built in the last few years, Rowsonh said. Warmington purchased the 10-acre industrial site in December 2008.
Standare Pacific Homes had an optio n on the land in 2006 at the top the markeft and began work onthe project. But Standard walked away when the markey soured and creditbecame unavailable. The property reverted back to theorigina owners, San Jose Property Investment LLC and DAK, a California generalk partnership. Warmington bought the land from San Jose Property Investmentand DAK. The company has an agreemenf with the original owners to develop the propertyin “This is an extended it’s not a churn,” said Matt Tingler, Warmington’s executive vice “We’re very sensitive to oversupply.
” Irvine-basexd Standard Pacific Homes, a major developer of projects in the hard-hit Central did not return calls seeking comment. Tingler woulc not disclose thepurchase price, but he made it clea r the builder is operating as economically as possible. “Since approximately 2006 we stopped buyingv land and resolved to sell through our existinyg portfolioof projects,” Tingler said. “We have a handfulp of projects still remaining thatare But, since we never overextended during the boom, we now have fewer troubled projects to work through.” This most receny acquisition comes at an opportunr time for Warmington.
The companyy has trimmed its portfolio from 30 projectsto five, a number Tingledr said Warmington is very comfortable with. Its determination to get lean presents itsown challenges. Now the homebuilderf is almost outof homes. “We sold out of Viridian in San Jose and Vantagw inPalo Alto,” Tingleer said. “. We had a ton of producr that we movedthrough quickly, and we paid back our debt. Now we’ree out of product.” That strategy, however, is servingf Warmington well as it pursues its nextline — managinvg distressed assets for three banks, Comerica Bank, Guaranty Plus Propertie 2 LLC and Bank of America.
Tingleer said Warmington started chasing the business 18 monthaago — before the market was ready. Now there’xs a lot of competition, although little is locatesd in the core Bay Area market most is currently in the tertiary markets in theCentrakl Valley. Warmington competed against other builders for the busineszs that can entail everything from securing the property to ensuring therde isno vandalism. “We’re not actingf as a broker; we’re not selling the property forthe bank, but we can give a builder’s perspectiver of what it’s worth,” he said.
Warmington is a veteranb of such business, Tingler said, having performeed similar duties during the last major housintg recession in the late 1980s andearlyh 1990s. The company has agreefd to sell more than 600 homes in five marketx located in Southern California and Nevada for TriPacific CapitalAdvisorz LLC. Asked whether the work paid he said, “From our perspective, any revenue coming in representss dollars that we would nototherwises have. The goal is to help our financia partners while at the same time generate revenue to helpcovefr overhead.
” It also keeps Warmington abreast of what’s going on in many Rowson said the South Bay has the greatesf opportunity for upside. At a seminar there was talk that said the markeris close, if not at, the bottom. “The Bay Area core marketxs have the greatest potentiao to solidify right now over the next six monthws and then showan uptick,” he said.